New York Courts Continue to Differ on Interpretation of Primary and Noncontributory Clauses

Most insurance professionals encounter additional insured coverage issues on a daily basis, and priority of coverage is sometimes part of an additional insured analysis. Policies issued by insurance carriers contain primary and noncontributory language on an increasing basis, and that language is sometimes located within a separate endorsement or may be part of the additional insured endorsement. Generally speaking, a primary and noncontributory provision modifies the policy’s other insurance provision to specify that coverage provided under the policy to an
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Federal Court Crusades for Serial Comma, Holds No Coverage for Inflatable Beach Ball

When a festival-goer is injured by a flying beach ball, does a general liability insurer have to pay for any ensuing loss? Is the serial comma (sometimes referred to as the Oxford comma) dead? Both questions were addressed by a Florida federal court when deciding who was responsible to pay for a party foul.   In May 2018, Robert Hunt brought a lawsuit seeking compensation for injuries he sustained while attending a festival called Rum Fest 2017. During the event,
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Washington High Court Finds that Certificates of Insurance Can Create Coverage

Answering a certified question from the Ninth Circuit, the Washington Supreme Court issued a surprising decision, holding that certificates of insurance can create coverage despite express disclaimers that they do not “amend, extend or alter the coverage afforded by” the policy.[1] This decision is inconsistent with precedent from courts across the country that routinely hold certificates of insurance are informational documents only that cannot supplant the terms of an insurance policy. In this Washington case, T-Mobile USA, made a demand for additional
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Federal Judge Finds Mischievous Raccoons Incapable of Engaging in Vandalism or Malicious Mischief

A federal judge in the Western District of Pennsylvania dismissed a breach of contract and bad faith suit against an insurer by finding that a group of mischievous raccoons was incapable of committing vandalism or malicious mischief.[1] At issue was substantial interior property damage to a Pittsburgh-area home owned by the plaintiff-insured caused by raccoons. The plaintiff submitted a claim under its named-peril policy for the damage. The insurer denied coverage because the named-peril policy only provided coverage for damage
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Insurers’ Pre-Disclaimer Legal Privileges Against Disclosure Still Under Attack

Otsuka America, Inc. and Pharmavite LLC v. Crum & Forster Specialty Insurance Company[1] is the latest in what looks like ongoing erosion of an insurer’s right to rely on attorney-client privilege and the work product doctrine in connection with a determination of insurance coverage. The insurer denied coverage to the plaintiffs for a nine million dollar product recall loss. The plaintiffs filed this action to resolve the insurance coverage issue. The court correctly identified the governing law, recognizing that “attorney-client
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Unreasonable Expectations: New Jersey Appellate Court Rejects Commercial Insured’s Reliance Solely on Policy’s Declarations Page

Key Takeaways: New Jersey courts have been increasingly reluctant to extend the protections of the reasonable expectations doctrine to commercial insureds In addition to making the usual policy-based arguments, an insurer facing a coverage action in New Jersey based on the reasonable expectations doctrine should be sure to challenge the sufficiency (or lack) of evidence presented by the insured with respect to its actual expectations of coverage New Jersey courts will consider extrinsic evidence to assess whether an insured’s claimed
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Washington State Supreme Court Holds That Insurance Adjusters Cannot Be Liable for Bad Faith

In a highly anticipated decision, the Supreme Court of Washington closed the door on statutory bad faith claims against insurer-employed adjusters. The case is Moun Keodalah and Aung Keodala v. Allstate Insurance Company, Tracey Smith., and John Doe Smith, — P.3d – (2019, 2019 WL 4877438 (Wash. Oct. 3, 2019). The case arose out of a 2007 accident, when an uninsured motorcyclist struck the plaintiff’s truck, killing the motorcyclist and injuring the plaintiff. The police investigated the collision and determined
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Part 3: Coverage Considerations Under CGL Policies for CCPA Violations

This blog post is our third in a multi-part series addressing what insurers need to know about the California Consumer Privacy Act (CCPA). Imagine this: You own a successful string of sporting goods stores across California. Not only do you sell goods directly, but you also finance large purchases to well-qualified buyers and have a generous rewards program. When customers log in to your website, you gather personal information (e.g., name, email address, cell number, etc.). In order to participate
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Illinois Federal Court Refuses to Extend NY Insurance Law 3420 to Policy Not Issued or Delivered in New York

An Illinois federal district court in Frankenmuth Mutual Insurance Company v. The Hockey Cup, LLC held that an insurer was excused from its defense obligations due to late notice, since the court found that New York Insurance Law Section 3420(a)(5)’s requirement that insurers show prejudice to deny coverage based on late notice did not apply because the policy was not issued or delivered in New York.  The underlying lawsuit, in which the National Hockey League was one of the plaintiffs,
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Texas Supreme Court Asked to Decide if Texas Recognizes Limited Exception to Eight-Corners Rule

In State Farm Lloyds v. Richards, the federal appellate court asked the Texas Supreme Court to decide whether Texas law recognizes a limited exception to the so-called eight-corners rule applied when evaluating an insurer’s duty to defend its insured for a third-party liability claim.[1] Under the eight-corners rule (referred to as the four corners rule in some jurisdictions), an insurer’s duty to defend is measured by the allegations of the complaint and the language of the policy.  Evidence outside of
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